Good morning Farmer Family …
US farm markets were mixed but mostly higher yesterday.
Corn prices were firm, capturing gains of around 0.5%.
Soybeans recovered some of their Friday selloff with gains of around 0.7%.
Soymeal prices turned positive through the day and closed a net 0.57% higher.
Bean oil prices were up by 2.89% on the day.
Wheat prices were mixed but mostly lower, meantime.
Chicago SRW wheat prices indeed ended more then 1% lower.
Kansas City wheat faded through the afternoon as well, though stayed only fractionally weaker at the close, as was 0.28% down .
Spring wheat prices also were fractionally weaker, down 0.2%.
USDA’s US Small Grains 2022 Summary surprised the wheat market last Friday with 2022/23 all-wheat production estimated at 44.9Mt compared to 48.5m the earlier USDA WASDE September forecast.
Winter wheat was pegged at 30.0m (32.6Mt Sept forecast), durum 1.7Mt (2.0Mt Sept) and other spring wheat 13.1Mt (13.9Mt Sept).
Thus, wheat prices suffered a modest technical setback yesterday after reaching three-month highs late last week.
Corn prices made modest inroads, meantime, as traders continued to focus on Friday’s surprising stocks data.
Lingering concerns about this season’s true production potential created additional tailwinds.
Soybean prices, on their parts, emerged from Monday’s session with some gains partly due to more dry forecasts that could further limit this season’s production potential.
Meantime, the USDA reported corn export inspections were 661,658 MT for the week that ended 9/29.
That was up from 549,608 MT last week but down from 941,560 MT from the same week last year’s.
China (64%) and Mexico (30%) made up over 90% of the total shipment for the week.
Accumulated shipments reached 2.358 MMT for the season, up by 3.9% yr/yr.
As for soybean, data showed 575,220 MT of soybeans were shipped during the week that ended 9/29.
That was up from 291,413 MT last week, but down from 849,556 MT (-33%) from the same week last year.
Germany, Algeria, and Mexico were the week’s top destinations.
Accumulated exports reached 1.781 MMT through 9/29, compared to 1.839 MMT last season.
As for wheat, export inspections were reported at 667,577 MT.
That was up 78k MT wk/wk and was up 51k MT from the same week last year.
The Philippines and China were the top destinations.
White wheat was the top variety with 42% of the total export, followed by HRS with 29%.
Accumulated wheat exports reached 8.516 MMT through 9/29 compared to 8.751 MMT at the same point last year.
Separately, private exporters yesterday reported to the USDA having sold 110,000 metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.
Yesterday, USDA also posted its monthly Grain Crushings data showing August’s corn draw for ethanol was 432.281 mbu.
That was inline with expectations and was 3% lower than July’s pull.
August of ’21 was 416.8 mbu.
That completed the 21/22 campaign with 5.325 bbu for ethanol production, the September WASDE had figured 5.33 billion, and the season prior used 5.033 bbu.
As for soybean, the monthly Fats and Oils report showed 175.05 mbu of soybeans were processed in August.
That was down from 181 mbu in July, but up from 168 in August, setting a new record for the month.
The trade average guess was 175.6 mbu going in.
The 2021/22 MY used 2.203 billion bushels of soybeans for meal and soy oil production, that was just 2 mbu below the latest WASDE figure – but was still a record.
The monthly update also had 2.12b lbs of soybean oil – down from 2.228b last month and even with the trade average guess.
After the sessions close, Weekly Crop Progress data showed, as of Oct. 2, 96% of corn has reached the dented stage, slightly below the five-year average of 97%.
Seventy-five percent of corn was mature, on track with the five-year average.
Twenty percent has been harvested, behind the five-year average of 22%.
Corn crop condition was rated 52% good/excellent, reflecting no changes for the third week in a row.
As for soybean, USDA’s report noted 81% of soybeans are dropping leaves, ahead of the five-year average of 79%.
Just 22% of soybeans have been harvested.
The five-year average for this time is 25%.
Soybean crop condition was rated 55% good/excellent, reflecting no change for the third week in a row.
As for wheat, forty percent of winter wheat was planted, behind the five-year average of 44%.
Fifteen percent of winter wheat has emerged, behind the five-year average of 17%.
Meantime, according to NOAA, between today and Friday, the Northern Plains and upper Midwest could see light to moderate rainfall.
Much of the eastern Corn Belt won’t see additional measurable moisture during this time, however.
NOAA’s new 8-to-14-day outlook predicts seasonally warm, dry conditions for most areas west of the Mississippi River between October 10 and October 16.
In this context, corn basis bids were mostly steady to soft after dropping 5 to 25 cents lower across seven Midwestern locations.
A Nebraska elevator bucked the overall trend after firming 5 cents higher.
Soybean basis bids fell 5 to 55 cents lower across half a dozen Midwestern locations while holding steady elsewhere across the central U.S..
Commodity funds were net buyers yesterday for 1,500 lots of corn and 4,000 lots of soybeans.
They were net sellers for 2,000 lots of wheat.
On this morning, Chicago corn prices slid, as traders took a breather after two straight sessions of gains, although the slower-than-expected pace of U.S. harvest provided a floor under the market.
Wheat declined for a second consecutive session, after climbing to a three-month high last week on the back of heightened Russia-Ukraine tensions.
Particularly, the most-active corn contract on the Chicago Board of Trade lost 0.6% to $6.76-3/4 a bushel, as of 03:29 GMT.
Wheat lost 0.6% to $9.06-3/4 a bushel and soybeans gave up 0.1% to $13.72-1/4 a bushel.
In energy markets, oil prices edged higher on Tuesday on expectations that OPEC+ may agree to a large cut in crude output.
Thus, Brent crude futures rose 46 cents, or 0.5%, to $89.32 per barrel by 06:29 GMT after gaining more than 4% in the previous session.
U.S. crude futures rose 30 cents, or 0.4%, to $83.93 a barrel.
The benchmark gained more than 5% in the previous session, its largest daily gain since May.
Investors expect that the OPEC+, will cut output by more than 1 million barrels per day (bpd) at their first in-person meeting since 2020 on Wednesday.
Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic.
The production cut being considered was justified by the sharp decline in oil prices from recent highs.
However, concerns about the global economy could cap the upside.
Also, U.S. crude oil stocks were estimated to have increased by around 2 million barrels in the week to Sept. 30.
In ocean freight markets, the Baltic Exchange’s main sea freight index, rose for a second straight session on Monday on higher capesize rates, while other vessel segments stayed flat.
The overall index, indeed, was up 28 points, or 1.6%, at 1,788 points.
Particularly, the capesize index gained 86 points, or 4.4%, at 2,041 points, on its best day in six.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, gained $710 at $16,924.
The panamax index was flat at 2,082 points, following a four-session winning streak.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, lost $1 at $18,741.
Among smaller vessels, the supramax index was unchanged at 1,663 points.
In equity markets, US stocks rallied sharply on Monday, as the 10-year T-note yield fell sharply to 3.62% from 3.83% late Friday.
It got as high as 4% last week after starting the year at just 1.51%.
The yield on the two-year Treasury, which more closely tracks expectations for Fed action, fell to 4.11% from 4.27%.
A report on U.S. manufacturing came in weaker than expected, along with data showing a drop off in construction spending from July to August. That may seem discouraging, but could mean the Federal Reserve can ease off on raising interest rates to beat down the high inflation damaging households’ finances.
The U.S. Sep ISM manufacturing index, indeed, fell -1.9 to a 2-1/4 year low of 50.9, weaker than expectations of 52.0.
U.S. Aug construction spending fell -0.7% m/m, weaker than expectations of -0.3% m/m and the biggest decline in 1-1/2 years.
On this wake, New York Fed President Williams said that though the Fed’s job is “not yet done,” and he sees economic growth flat in 2022 and inflation falling to around 3% next year.
Meantime, the rally in energy stocks pushed the overall market higher.
In this context, Wall Street soared to its best day in months.
The S&P 500’s leap of 2.6% to 3,678.43 was its biggest since July.
The Dow Jones Industrial Average jumped 2.7%, to 29,490.89, and the Nasdaq composite gained 2.3% to 10,815.43.
Monday’s rally came despite an 8.6% drop for Tesla.
Apple and Microsoft both rose more than 3% meantime.
On this morning, Asian shares rose, encouraged by the rally in U.S. shares.
Japan’s benchmark Nikkei 225 added 2.8% in afternoon trading to 26,959.25.
South Korea’s Kospi gained 2.5% to 2,209.98.
Australia’s S&P/ASX 200 jumped 3.8% to 6,699.30 after its central bank boosted its benchmark interest rate for a sixth consecutive month to a nine-year high of 2.6%.
The Reserve Bank of Australia’s increase of a quarter percentage point to the cash rate, however, was smaller than those at recent monthly meetings.
Markets in Hong Kong and Shanghai were closed for holidays.
In currency trading, the U.S. dollar inched up to 144.84 Japanese yen from 144.81 yen.
The euro cost 98.28 cents, inching down from 98.40 cents.
From Canada, Saskatchewan Agriculture said that 83% of Saskatchewan spring wheat was harvested as of September 26th.
Their yield estimate still is at 43bu/acre.
Alberta Agriculture expects 83% of Alberta spring wheat to be harvested as of September 27th.
They gave no updated yield estimate, so we assume it still is at 54 bu/ acre.
In Manitoba, 74% of spring wheat is harvested, with yields estimated at 60-75 bu/acre.
These yields imply a 24.1 million mt spring wheat production compared to the September StatsCan estimate of 26.1 million mt for 2022 spring wheat.
As for for durum, harvest is essentially finished.
Saskatchewan Agriculture still has Saskatchewan durum yields at 30 bu/acre, while Alberta Agriculture did not give a yield.
Overall said, using both Saskatchewan Agriculture and average provincial yields estimates’, would result in a 5.4 million mt durum production, compared to the latest StatsCan estimate of 6.1 million mt!
There were a lot of varied yields, and so the final verdict is still out there.
Meantime, as we said in the previs report, Canadian wheat export loadings for week 8 were unusually good at 628k mt, for a year-to-date total of 2.4 million mt.
Bids to farmers have firmed, reflecting the improved shipments.
However, there are also a total of 3.3 million mt of wheat in the handling system, and there are some concerns about sufficient rail movement to keep this momentum going.
Prices for common wheat have been supported by strong futures and a weak Canadian dollar, past week.
There were several “specials” at prairie elevators close to C$12.00 for November delivery.
Canadian durum exports have remained small, meantime, with only 28k mt loaded during week 8.
However, past week there were bids from a couple of companies at C$12.50/bu in Saskatchewan.
From South America, excess rains in some areas of Brazil have slowed sowing of the country’s 2022/2023 soybean crop, according agribusiness consultancy AgRural on Monday.
As of last Thursday, the total area planted with the oilseed reached 3.8% in the world’s largest producer of soybeans.
This compares with 4.1% a year ago, according to AgRural.
AgRural also said Brazil’s summer corn sowing is 34% complete in the center south, where most of the country’s output comes from.
This compares with 32.6% at the same time a yea ago, the consultancy said.
At the same time, a separate forecast from consultancy Safras & Mercado on Monday showed a slightly different picture for Brazil’s soy planting.
Safras, indeed, pegged domestic soy sowing at 4.5% of the estimated area through last Friday, above the 4% seen last year and higher than a five-year average of 3.1%.
Safras estimates farmers will plant soy on 42.88 million hectare (105.9 million acres) this year.
Meantime, the Brazilian government predicts Brazilian growers will reap a record of around 150 million tonnes of soybeans this season and a record 125.5 million-tonne total corn crop, barring weather issues.
StoneX on Monday rose its projection for Brazil’s soy production to 153.8 million tonnes and the total corn forecast to 126.3 million tonnes, in spite a drop in Brazil’s summer corn forecast related to a fall in planted area.
Meantime, Brazilian corn exports in September climbed to 6,78 MMT, according to governmental data.
That was more than double the exports tallied in September 2021.
Brazil reported September soybean exports were 4.294 MMT, compared to 4.827 MMT in Sep ’21.
That was a year-over-year decrease of around 11%.
In Argentina, Buenos Aires Grain Exchange said prolonged drought conditions resulted in 2022/23 maize plantings of just 6pc complete (3pc previous week, 17pc previous year), with fieldwork largely confined to central provinces.
Rainfall is urgently required given that the optimal window for early-planted fields closes at the end of October.
Dry conditions delayed fieldwork in parts of Buenos Aires and Cordoba provinces.
Limited rainfall remained a challenge for wheat crops, especially across the centre and the north, with conditions rated at 55pc fair/excellent (58pc, 76pc).
In Europe, yesterday we saw a downturn in wheat prices on Euronext.
European grains, indeed, seems penalized by international competition.
The latest Algerian wheat tender would have notably concluded with the purchase of a volume of approximately 300 kt of milling wheat, mainly of Russian origin and only 30 kt of French wheat would have been selected.
Corn and rapeseed prices, on their parts, changed little yesterday.
Sowing of winter cereals has started in France thanks to drier weather since yesterday and under conditions that seem favourable.
The European Commission has raised its 22/23 rapeseed production forecast by 400,000t, to 19.3Mt (17.0Mt previous year).
The common wheat production forecast was raised by 1.1Mt, to 127Mt (130.1m previous year).
The barley forecast was increased by 1.0Mt, to 51.5Mt (52.0Mt)
Meantime, the European Commission reduced EU consumption of maize 22/23 by 4.9 Mt (77.4 Mt), while imports were raised by one million tonnes (21 Mt).
On this wake, Hungary has imported about 1 million tonnes of maize, nearly a quarter of its annual needs in the past 12 months mostly from Ukraine as a severe drought destroyed a large part of its domestic crop, industry representatives said on Monday.
Under normal circumstances, Hungary is a maize exporter.
According to industry estimates, Hungary will harvest 2.8-3.6 million tonnes of maize while the country needs about 4.5 million tonnes every year.
Most of that is used by producers of bioethanol, high fructose corn syrup and animal feed.
Last year Hungary harvested 6.5 million tonnes of maize, according to data from the Central Statistics Office.
Meantime, according to Stratégie Grains, better than expected harvest results, including in Germany, France and Poland, have pushed 2022/23 rapeseed production forecast up by 300,000t, to 19.5Mt (+15pc y/y) and that widespread Sept rains helped European farmers carry out 2023/24 rapeseed sowing after a severe summer drought, while boosting soil conditions for upcoming wheat and barley.
However, more rains are needed to replenish moisture deficits.
On the other hand, avian flu is spreading in Europe and France, raising fears of a drop in demand for feed grains in the months to come.
From North Africa, Egyptian Supply Minister Ali Al-Moseli commented on the issue of wheat supplies after 4 regions joined Russia after a popular referendum.
Particularly, the Egyptian minister said that after the referendum there is no crisis in the dossier of wheat from Russia.
He added that Egypt’s neutral policy of working with the whole country had avoided a crisis in the wheat crop upon arrival in Egypt.
Meantime, the Minister of Supply has sent a letter of thanks to the European Union for its full support in meeting Egypt’s contracted quotas for the first time in years that the Ministry of Supply received more than 6 months of reserve for wheat.
From Russia, farmers have accelerated winter wheat sowing after recent rain eased dry soil conditions in some regions, the Russia-focused Sovecon consultancy said on Monday.
Particularly, farmers in Russia have sown winter grains on 9.4 million hectares compared with 10.7 million hectares around the same date a year ago, Sovecon said.
The year-on-year lag has decreased from the previous week’s 1.5 million hectares, the consultancy added.
Recent rains boosted moisture for winter grains in regions that were too dry until mid-September, Sovecon said.
Rain is forecast in Russia’s southern and central regions this week while the Volga region is expected to be dry.
Meantime, Russia kept grain exports steady at 870,000 tonnes last week.
On this wake, Sovecon raised its forecast for Russia’s 2022/23 July-June exports by 300,000 tonnes to 43.4 million tonnes of wheat.
Meanwhile, it kept its estimate for barley and corn exports unchanged – at 6.0 million tonnes and 4.8 million tonnes, respectively.
In this context, Russian wheat prices were steady last week.
Particularly, according to the IKAR, Russian prices for wheat with 12.5% protein content and for supply from Black Sea ports were stable at $325 per tonne free on board (FOB) at the end of last week.
Price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 12,550 rbls/t -100 rbls (Sovecon);
Price for sunflower seeds was at 22,500 rbls/t -725 rbls (Sovecon);
Price for domestic sunflower oil was at 73,325 rbls/t -2,350 rbls (Sovecon);
Price for domestic soybeans was at 31,675 rbls/t -725 rbls (Sovecon);
Export price for sunflower oil was at $1,220/t -$10 (Sovecon);
Export price for sunflower oil was at $1,080/t -$55 oil (IKAR);
Price for white sugar, Russia’s south, was at $949.3/t +$113.6 (IKAR).
In Ukraine, the Ukrainian Trade Ministry reported 2.08 MMT of corn were shipped during September, adding to the 1.85 MMT from August.
All grain shipments trail the last year’s pre-invasion pace by 23.6%.
The Ministry also reported September wheat shipments were 1.75 MMT, adding to the 900k MT August export.
MYTD exports have reached 3 MMT.
Total grain exports for the month of Sep were down 23.6% yr/yr.
From South East Asia, in India is likely to receive above-average rainfall in October, posing risks for summer-sown crops such as rice and the planting of wheat.
Monthly rainfall is expected at 115% of the long-term average.
Heavy rains in October could damage ripening crops such as rice, pulses, cotton and soybeans, while may delay wheat planting in parts of India.
Within weeks of harvesting the rice crop, millions of Indian farmers start planting wheat in October.
Growers harvest the wheat crop in March and April.
From Australia, Monday’s NSW and SA public holiday markets lacked grower bids but wheat numbers were up $5-8/t and canola, showing some very good gains, was bid up $15-20/t.
Old crop liquidity was steady throughout the day on Clear Grain Exchange with a bit over 12,000t traded across the country.
Some October delivered ex-farm demand popped up from buyers to limp to the end of their old crop programs, but with wet weather remaining relentless it will continue to push harvest out and come on a tad later in eastern Australia.
Rain showers are forecast to push across most parts of the South Australian growing region today, while the bulk of the east coast rain event is still expected to arrive Wednesday.
The market continues to worry about quality for new crop and now it’s a wait and see as to what crops can withstand this next round of east coast rain.
On the international trade scene, Turkey’s state grain board TMO has issued an international tender to purchase and import a total of 495,000 tonnes of animal feed barley.
The deadline for submission of price offers in the tender is Oct. 11.
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 97,343 tonnes of food-quality wheat from the United States and Canada in regular tenders that will close on Thursday.
That’s all, thank you.
We wish you a good day.
Author: Sandro F. Puglisi
